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CIMA BA1 - Fundamentals of Business Economics

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Total 468 questions

What is the mam objective or the PESTEL framework?

A.

To identify the key factors in the business environment that are likely to affect a company's performance

B.

To identify the key determinants of a company's profitability

C.

To identify the key people who should be involved in a company's decision making process

D.

To identify the key external stakeholders that are likely to be impacted by a company's activities.

Assuming Country A has a floating exchange rate which of the following would lead to a fall of the exchange rate for Country A and which rise m the exchange rate for Country A.

Complete the table below by matching the relevant label on the exchange rate of the scenarios listed.

Setting a minimum wage above the equilibrium wage

A.

has no effect on unemployment, and setting a minimum wage below the equilibrium wage results in increased unemployment

B.

results in increased unemployment, and setting a minimum wage below the equilibrium wage has no effect on unemployment.

C.

results in decreased unemployment, and setting a minimum wage below the equilibrium wage results in increased unemployment.

D.

results in increased unemployment, and setting a minimum wage below the equilibrium wage results in decreased unemployment

The use of hedging is to reduce or eliminate exposure to which of the following?

1. Credit risk

2. Economic risk

3. Transaction risk

4. Transition risk.

A.

1, 3 and 4

B.

1, 2 and 4

C.

2, 3 and 4

D.

1, 2 and 3

The following table provides the frequency distribution and cumulative frequencies of the cost of monthly rent for 120 apartments. What is the percentage of apartments whose monthly rent is less than $510?

A.

21%

B.

50%

C.

25%

D.

41%

Which of the following is correct in regards to organisations?

Organisations achieve more than individuals can achieve on their own because they enable people to

(1) share skills and knowledge

(2) maximise individuals' interests.

(3) specialise

(4) pool resources

A.

(1), (2)and(3)

B.

(2), (3) and (4)

C.

(1),(2)and(4)

D.

(1), (3) and (4)

Which TWO of the following policy actions might be available to a government that wishes to reduce a deficit in the balance of payments?

A.

Devaluate the exchange rate in order to increase exports.

B.

Increase the money supply in order to stimulate domestic consumption.

C.

Appreciate the exchange rate in order to reduce imports.

D.

Reduce the interest rate in order to stimulate investment.

E.

Introduce tariffs on imported goods in order to favour domestic producers.

What does the term 'equity financing' mean?

A.

A company financing a short term cash flow shortage by borrowing from a financial intermediary.

B.

A company investing its excess liquidity by purchasing shares.

C.

A company selling off some of its tangible assets to pay for debts.

D.

A company financing its liquidity deficit by issuing shares.

A company currently sells 10,000 bottles of "bright pink" nail varnish every year at $5 per bottle If the price is reduced to $4.50 per bottle it is expected that the company will sell an extra 2,000 bottles

What is the price elasticity of demand of the nail varnish?

A.

-2.0

B.

+2.0

C.

-0.5

D.

+0.5

Which of the following is NOT a feature of the data?

A.

Big data analysis requires companies to invest in specialist data analytic skills

B.

Big data can sometimes be harvested from electronic devices such as smart meters and GPS systems

C.

Big data is such a large volume that it cannot be analysed through spreadsheets

D.

Big data is purposefully collected from carefully designed samples through surveys and interviews